K K Silk Mills Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹10.00−₹0.30 (−2.91%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of K K Silk Mills Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

K K Silk Mills Limited engages in the manufacturing and trade of fabrics and garments in India, Hong Kong, and internationally.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Annual revenue₹245 Cr

How does it make money?

Turns over ₹245 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation.

EBITDA margin5.9%

Net margin2.0%

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

What is its competitive advantage?Some evidence

ROCE of 15.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE15.8%

ROE8.9%

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +30% while net margin moved +254% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+30%

Margin effect+254%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

58/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

88/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

3.6x

1.0Y Median

5.3x

12 monthly readings · mean 5.7x · range 4.3x–11.0x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 1.0y median of 5.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 95% below the peer median of 69.2x.

vs. its own history

Cheap

5.3x median over 12 months · -32%

vs. sector peers

Cheap

69.2x median of 4 peers · -95%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

3.6x

P/B

0.32x

EV/EBITDA

5.4x

PEG

0.05

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 3.2% to 6.9%.
Valuation below its historical average
At 3.6x the stock trades 32% below its own median of 5.3x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 135% against revenue growth of 30% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 135% against revenue up 30% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹16 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 32% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 95% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 135% against revenue up 30%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 5.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹16 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 7% a year✓ 9.0% CAGR
Latest reported year was 8.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

6 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹22 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

3.6x

Cheap

Cheap against the generic band

P/B Ratio

0.32x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.8

Profitable

Profitable on a per-share basis

ROE

8.9%

Moderate

Moderate capital efficiency

ROCE

15.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.80x

Moderate

Moderate leverage

Revenue Growth (YoY)

8.1%

Modest

Modest growth

Profit Growth (YoY)

-46.9%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹20 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹10

ROA

4.7%

Average

Average asset productivity

Operating Margin

3.8%

Weak

Thin margins leave little room for error

Net Margin

2.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.53

Comfortable

Healthy short-term liquidity

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

9.5 / 9.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

60.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹189 Cr	₹190 Cr	₹221 Cr	₹245 Cr	+9.0%
EBITDA	₹9 Cr	₹10 Cr	₹14 Cr	₹14 Cr	+18.1%
EBITDA Margin	4.6%	5.1%	6.5%	5.9%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹5 Cr	₹5 Cr	+66.2%
EPS	₹0.47	₹1.01	₹2.09	—	—
ROE	3.2%	6.5%	11.8%	6.9%	—
ROCE	16.1%	18.0%	26.4%	15.8%	—
Total Debt	₹48 Cr	₹52 Cr	₹59 Cr	₹56 Cr	+5.2%
Free Cash Flow	₹4 Cr	₹2 Cr	-₹2 Cr	-₹16 Cr	—

🟢 Revenue has grown at 9.0% a year over 3 years.

🟢 EBITDA has grown at 18.1% a year over 3 years.

🟢 EBITDA Margin has risen from 4.6% to 5.9% over 3 years (+1.3 pts).

🟢 PAT (Net Profit) has grown at 66.2% a year over 3 years.

🟢 ROE has risen from 3.2% to 6.9% over 3 years (+3.7 pts).

🟡 ROCE has held roughly flat at 15.8% over 3 years.

🔴 Total Debt has grown at 5.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹16 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹174 Cr

Total Liabilities

₹104 Cr

Total Debt

₹56 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹8 Cr

Capex

-₹8 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.6%

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

6 general

Compare with

Equitymaster, 16 Oct

K K Silk Mills shareholders unanimously approve all AGM resolutions

scanx.trade, 27 Aug

K K Silk Mills Ltd Peer Comparison – Compare with Others

Value Research, 30 Aug

K K Silk Mills IPO Lists 16% Down Despite Strong 5.66x Bids

HDFC Sky, 03 Dec

K K Silk Mills share price makes a weak debut, stock opens with a 15.79% discount at ₹32 apiece on BSE SME

Livemint, 03 Dec

K K Silk Mills IPO GMP, Date, Price Band & Review

IndiaIPO, 21 Nov

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.3/20

🟡Financial HealthAdequate9.7/20

🟢GrowthStrong16.1/20

🟡ProfitabilityModerate7.1/15

🟢ValuationAttractive13.2/15

🔴RiskHigh2.5/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 4%5.9%
✗Debt / EBITDA falls below 3x3.9x
✗Free cash flow remains positive-₹16 Cr
✗Interest cover stays above 3x2.2x
✓Revenue growth stays above 7% a year9.0% CAGR